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Calyx & CorollaES1- G8Nilanjan BASUStphane QUENETGuillermo PENSO BLANCOAnumeha SINHA
Nozomi TAKAYANAGI
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Outline
Background
Case
Analysis
Strategy
Marketing Plan
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Background: Calyx & Corolla
Flower market: $8.4 billion and a growing rate of7.7% since 1985
Innovative value chain
Human capital as one of its main resources
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Case
Initial success and $1 million capital increase
Hiring of ES1-G8 marketing group to assessstrategy
Further growth and market share
Asses its competitiveness
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ES1-G8 Analysis
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Core competencies
Strong relationship with other members of thevalue chain
Supply Distribution
Logistics
Customer Service
Marketing
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Porters five forces analysis
Different forces haveunequal bargaining
power
Affects the industrysattractiveness andcompetitiveness
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Bargaining Power of Suppliers
Provide materials and services to the industry
Attempt to gain a larger share of the profit byraising their cost
Growers
Federal Express (FedEx)
Threat of Integration by growers
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Bargaining Power of Customers
Buyers --individuals or organizations-- are thosewho create demand in an industry
Very limited or no bargaining power
Small size
Lack of organization
Can change
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Threat of New Entrants
Raise competition
Dependent on entry barrier
High entry barriers
New entrants new to find new ways to be moreefficient
High initial investment
Relationships and strategic alliances take time
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Threat of Substitute Products
Lower industry attractiveness and profitabilitysince they limit price levels
Depend on:
Buyers propensity to substitute
Potential switching costs
The relative price and performance of substitutes
Differentiation as key to maintain customersloyalty
Quality
Delivery
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Competitive Rivalry within anIndustry Generally rivalry will be high in an industry if:
There is l ittle differentiation between the products sold tocustomers
Competitors are approximately the same size of each other Competitors all have similar strategies
Exit barriers are high, hence prompting competitors to stay
C&C has a distinctive concept
Low competition on niche segment
High competition on flower market Florists TransworldDelivery (FTD)
59% market share
25.000 associate florists
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SWOTStrengths Good niche Placement Innovative value chain
Expertise in both mail-order andflowers High quality sales and customer
service staff Strong strategic alliances
Weaknesses Dependence on FedEx Dependence on Information
Technology to fulfill orders Lack of customization abilities vis--vis
the local florists Dependence on the growers to meet
customer expectations
Opportunities Exploiting the B2B market Improving IT systems to increase
efficiency Expanding continuity programs New potential customers in a
healthily growing market (7.7% since1965)
Threats Fragility of flowers Seasonality of demand Impact of weather on supply of
flowers Size of FTD (25,000 affiliate florists) and
associated marketing budget Supermarkets gaining market share
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Strategy
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Growth
Should plan on growing aggressively
Need to get more market share from FTD as wellas Supermarkets
Need to invest more on marketing; financingfrom investors
Need to confront FTD; Spend more on advertisingin the off-peak seasons
Less clutter easier to grab the customers attention
Customer likely to order with you even during peakseasons
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Marketing Plan
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Target market
Men and women over30 years of age
Substantial disposable income
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Positioning
Gift your loved ones freshness when and whereyou want
Emphasize freshness and assured day delivery Convenience an added factor
Dont treat it like a mail-order service but a giftservice
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Product
Expand your products from just flowers to more
Flowers
Bouquets Arrangements
Bonsai
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Distribution
Continue the current logistics arrangement
Increase the base of suppliers
Need to work out a deal with FedEx to includedeliveries on Sunday and holidays
Set up order systems/ kiosks at supermarkets
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Price
Maintain prices at current levels
Special package prices for birthdays,anniversaries and special occasions
Special benefits for re-orders
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Promotions
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Advertisement Success of the test campaign in Minneapolis
10% response rate: generate inquiries
2% orders: value derived from customers over thelifetime
Expand to other regions
TV spots
Radio
Print media
Outdoor hoardings
Mini brochures in newspapers
Mini brochures/ pamphlets at supermarkets
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Catalogue Catalogues should communicate warmth,
thoughtfulness and good wishes
Create special addendums for birthdays,anniversaries and holidays like Christmas, etc.
Include all gift options
With flowers include other accessories like
Cards (existing) Candles
Table decorations
Wines / Champagne
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Other associations
Tapping more in the B2B segment
Corporate clients for gifting
Adding clients in hospitality with continuousrequirements for flowers. E.g. hotels, hospitals, etc.
More promotional tie-ups with supermarkets andother businesses on the lines of the tie-ups withBloomingdale and SmithKline Beecham
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Questions??
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